Bill Text: HI SB173 | 2010 | Regular Session | Introduced

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Bill Title: Universal Health Insurance; Tax Credit; Appropriation

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced - Dead) 2009-05-11 - Carried over to 2010 Regular Session. [SB173 Detail]

Download: Hawaii-2010-SB173-Introduced.html

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Report Title:

Universal Health Insurance; Tax Credit; Appropriation

 

Description:

Creates a tax credit for employers to provide prepaid health insurance to part-time employees.  Requires employers to provide prepaid health insurance to all regular employees.  Mandates creditable health insurance coverage for all residents.  Creates state health insurance purchasing pool for individuals who do not otherwise have access to creditable coverage.  Makes an appropriation.

 

THE SENATE	S.B. NO.	173
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to universal health insurance.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§235-    Part-time employee prepaid health care tax credit.  (a)  Each individual and corporate resident taxpayer subject to the tax imposed by this chapter, who is an employer as defined in this section, and who files an individual or corporate net income tax return for a taxable year, regardless of adjusted gross income, may claim a part-time employee prepaid health care credit against the taxpayer's individual or corporate net income tax liability for the taxable year in which the credit is claimed and for which the income tax return is being filed.  The tax credit under this section, may be claimed by any employer who provides health care coverage for part-time employees by a prepaid group health care plan pursuant to chapter 393 and may be claimed only once in the taxable year regardless of the number of owners or the number of partners or corporate officers.

     (b)  The amount of the tax credit shall be an amount equal to fifty per cent of any costs of providing prepaid group health plan coverage for the taxable year in which the payments are made.

     (c)  All claims, including any amended claims, for tax credits under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

     (d)  If the tax credit under this section exceeds the taxpayer's income tax liability for any year that the credit is taken, the excess of the tax credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

     (e)  The director of taxation shall prepare any forms that may be necessary to claim a credit under this section.  The director may also require the taxpayer to furnish information to ascertain the validity of the claims for credits made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

     (f)  For the purposes of this section:

     "Employer" means any individual or type of organization, including any partnership, association, trust, estate, joint stock company, insurance company, or corporation, whether domestic or foreign, a debtor in possession or receiver or trustee in bankruptcy, or the legal representative of a deceased person, who has one or more regular employees in the employer's employment.  "Employer" does not include:

     (1)  The State, any of its political subdivisions, or any instrumentality of the State or its political subdivisions;

     (2)  The United States government or any instrumentality of the United States;

     (3)  Any other state or its political subdivisions or instrumentality of the state or its political subdivisions;

     (4)  Any foreign government or instrumentality wholly owned by a foreign government, if:

         (A)  The service performed in its employ is of a character similar to that performed in foreign countries by employees of the United States government or of an instrumentality thereof; and

          (B)  The United States Secretary of State has certified or certifies to the United States Secretary of the Treasury that the foreign government, with respect to whose instrumentality exemption is claimed, grants an equivalent exemption with respect to similar service performed in the foreign country by employees of the United States government and of instrumentalities thereof.

     "Part-time employee" means any person who engages in twenty or fewer hours per week of service, including service in interstate commerce, performed for wages under any contract of hire, written or oral, expressed or implied, with an employer, except as otherwise provided in sections 393-4 and 393-5 but does not include a person employed in a seasonal pursuit as defined in section 387-1."

     SECTION 2.  The Hawaii Revised Statutes, is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter    

HAWAII HEALTH INSURANCE purchasing pool

     §   -1  Definitions.  Whenever used in this chapter, unless the context otherwise requires:

     "Commissioner" means the state insurance commissioner.

     "Creditable health care coverage" means an insurance policy against bodily injury, disablement, or death by accident, or accidental means, or the expense thereof; against disablement or expense resulting from sickness; and every insurance appertaining thereto, including health and medical insurance that meets minimum coverage requirements as determined by the commissioner.  Creditable health care coverage includes an individual or group health insurance plan, medicare part B, United States Veterans Administration benefits, medicaid, or other state or federal public assistance benefit so long as that benefit meets the minimum coverage requirements as determined by the commissioner.

     "Eligible enrollee" means a person who is not eligible for coverage under chapter 393 and is not eligible to receive medical assistance that meets the minimum coverage requirements as determined by the commissioner under a medical assistance program administered by the department of human services, the Social Security Administration, or the United States Veterans Administration.

     "Health care plan" means any agreement by which any health care plan carrier, in consideration of a stipulated premium, undertakes to either:

     (1)  Furnish health care, including hospitalization, surgery, medical or nursing care, drugs or other restorative appliances, subject to, if at all, only a nominal per service charge; or

     (2)  Defray or reimburse, in whole or in part, the expenses of health care.

     "Health care plan carrier" or "carrier" means:

     (1)  Any medical group or organization that undertakes under a health care plan to provide health care;

     (2)  Any nonprofit organization that undertakes under a health care plan to defray or reimburse in whole or in part the expenses of health care; or

     (3)  Any insurer who undertakes under a health care plan to defray or reimburse in whole or in part the expenses of health care.

     "Program" means the Hawaii health insurance purchasing pool.

     "Resident" means a person whose primary place of habitation is situated within this State and who, when absent from that primary place of habitation, intends to return to it.  The following shall be prima facie evidence of residency within this State:

     (1)  Filing a Hawaii resident income tax return;

     (2)  Declaring in a home mortgage document that the mortgaged property located in this State shall be occupied as a primary residence;

     (3)  Signing a residential rental or lease agreement that declares that the rented or leased property shall be occupied as a residence for not less than ninety days;

     (4)  Registering to vote in any precinct within this State;

     (5)  Paying, on one's own behalf or on behalf of a dependent child or spouse, resident tuition fees for regular courses of instruction at any University of Hawaii system campus, including any community college;

     (6)  Having physical custody of a dependent child who is enrolled in a public school or charter school in this State;

     (7)  Receipt of public assistance from any program administered by the department of human services on behalf of one's self or on behalf of a dependent child;

     (8)  Obtaining any benefit, exemption, deduction, entitlement, license, permit, or privilege by claiming principle residency within this State.

     §   ‑2  Hawaii health insurance purchasing pool; established.  (a)  The Hawaii health insurance purchasing pool is hereby established.  The commissioner shall administer the program as provided by this chapter.

     §   ‑3  Creditable health coverage mandatory.  (a)  Every resident of this State shall obtain and maintain creditable health care coverage no later than October 1, 2009.

     (b)  Residents who do not obtain and maintain creditable health care coverage on or before October 1, 2009, or who do not obtain replacement creditable health care coverage within ninety days of losing creditable health care coverage, shall be enrolled in the Hawaii health insurance purchasing pool.

     (c)  Residents who are enrolled in the Hawaii health insurance purchasing pool shall be assessed a fee to cover a portion of the cost to the program of purchasing group health care coverage.  This fee shall be not less than $30 and not more than $200 per person per month as determined by the commissioner based on the resident's household income.

     (d)  This section shall not apply to any individual who, pursuant to the teachings, faith, or belief of any group, depends for healing upon prayer or other spiritual means.

     §   ‑4  Powers of the commissioner.  The commissioner may:

     (1)  Enter into contracts with carriers to provide health care coverage to eligible enrollees and their dependents.  Any contract entered into pursuant to this chapter shall be exempt from chapter 103D.  The commissioner shall not be required to specify the amounts encumbered for each contract, but may allocate funds to each contract based on projected and actual subscriber enrollments;

     (2)  Enter into other contracts as are necessary or proper to carry out this chapter;

     (3)  Employ necessary staff;

     (4)  Sue or be sued, including taking any legal actions necessary or proper for recovering any penalties for, on behalf of, or against, the Hawaii health insurance purchasing pool or the commissioner;

     (5)  Define the health care coverage that the program will purchase from carriers;

     (6)  Appoint committees as necessary to provide technical assistance in the operation of the program;

     (7)  Assess participating enrollees a reasonable fee not less than $30 and not more than $200 for necessary costs in connection with the program;

     (8)  Undertake activities necessary to administer the program, including the establishment of rules, conditions, and procedures for participation; marketing and publicizing the program; and assuring carrier and enrollee compliance with program requirements;

     (9)  Establish a financial relationship directly with producers or insurance brokers to provide services pursuant to the program;

    (10)  Approve the health care plans of carriers participating in the pool;

    (11)  Adopt rules pursuant to chapter 91 to administer the program; and

    (12)  Exercise all powers reasonably necessary to carry out the commissioner's responsibilities under this chapter.

     §   ‑5  Contracts with carriers.  On or after the effective date of this chapter, the commissioner shall enter into contracts with carriers for the purpose of providing health care coverage to eligible enrollees.  Operating characteristics of participating carriers shall include:

     (1)  Strong financial condition, including the ability to assume the risk of providing and paying for covered services.  A participating carrier may utilize reinsurance, provider risk sharing, and other appropriate mechanisms to share a portion of the risk;

     (2)  Adequate administrative management;

     (3)  A system for identifying in a simple and clear fashion both in its own records and in the medical records of subscribers and enrollees of the health care plan that the services provided are provided under the program;

     (4)  A satisfactory grievance procedure; and

     (5)  Where carriers contract with or employ health care providers, adequate mechanisms to:

         (A)  Review the quality of care provided;

         (B)  Review the appropriateness of care provided; and

         (C)  Ensure that health care services are accessible.

     §   ‑6  Carrier selection.  The commissioner shall contract with a broad range of carriers, if available, to ensure that eligible enrollees have a choice among a reasonable number and reasonable types of competing carriers.  The commissioner shall develop and make available objective criteria for carrier selection and provide adequate notice of the application process to permit all carriers a reasonable and fair opportunity to participate.  The criteria and application process shall allow participating carriers to comply with their state and federal licensing and regulatory obligations, except as otherwise provided in this chapter.  Carrier selection shall be based on criteria developed by the commissioner.  The administrator shall not eliminate any carrier from selection solely because of the carrier's size or limited service area.

     §   ‑7  Marketing and servicing contracts allowed.  Participating carriers may contract with producers or insurance brokers to provide marketing and servicing of health care coverage offered through the program.  Any commissions shall be determined by the participating carrier and the producer or insurance broker.

     §   ‑8  Conditions of participation; enforcement.  The commissioner shall set and enforce conditions of participation in the program for eligible enrollees that shall conform with the requirements of this chapter.

     §   ‑9  Fee collections.  The commissioner shall establish a mechanism to collect fees from enrollees.

     §   ‑10  Reenrollment restrictions.  The commissioner may assess a reasonable reenrollment fee against eligible enrollees who drop coverage after enrolling in the pool without obtaining other creditable coverage.

     §   ‑11  Rates offered.  Premiums shall not exceed one hundred and ten per cent of the median price of health insurance offered within the State calculated on an annual basis.

     §   ‑12  Right to appeal.  (a)  A resident claiming status as an eligible enrollee may appeal decisions on eligibility for or enrollment in the program to the commissioner, and shall be accorded an opportunity for a fair hearing.

     (b)  An eligible enrollee may appeal decisions on scope of coverage or service provision under the program to the commissioner, and shall be awarded an opportunity for a fair hearing.

     §   ‑13  Hawaii health insurance purchasing pool special fund.  There is created a Hawaii health insurance purchasing pool special fund.  The fund shall consist of moneys collected pursuant to this chapter, legislative appropriations for the commissioner's operating expenses, and any interest or earnings on moneys deposited into the fund.  Moneys within the fund shall be utilized for the purposes of this chapter; provided that the commissioner's operating expenses shall not be paid with moneys other than those appropriated by the legislature for that purpose."

     SECTION 3.  Section 393-3, Hawaii Revised Statutes, is amended by amending the definition of "regular employee" to read as follows:

     ""Regular employee" means a person [employed in the employment of any one employer for at least twenty hours per week] who engages in service, including service in interstate commerce, performed for wages under any contract of hire, written or oral, expressed or implied, with an employer, but does not include a person employed in seasonal employment.  "Seasonal employment" for the purposes of this paragraph means employment in a seasonal pursuit as defined in section 387-1 by a seasonal employer during a seasonal period or seasonal periods for the employer in the seasonal pursuit or employment by an employer engaged in the cultivating, harvesting, processing, canning, and warehousing of pineapple during its seasonal periods.  The director by rule and regulation may determine the kind of employment that constitutes seasonal employment."

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2009-2010 and the sum of $           or so much thereof as may be necessary for fiscal year 2010-2011 to be deposited into the Hawaii health insurance purchasing pool special fund.

     SECTION 5.  There is appropriated out of the Hawaii health insurance purchasing pool special fund the sum of $           or so much thereof as may be necessary for fiscal year 2009-2010 and the sum of $           or so much thereof as may be necessary for fiscal year 2010-2011 for the Hawaii health insurance purchasing pool program.

     SECTION 6.  The sums appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.

     SECTION 7.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 8.  This Act shall take effect on July 1, 2009.

 

INTRODUCED BY:	_____________________________